M Winkworth PLC

Good morning and welcome to the M. Winkworth PLC Interim Results Investor presentation. Throughout the recorded presentation, investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll and I would now like to hand you over to Dominic A. Gase, CEO. Good morning to you.

Good morning, everyone. It's a pleasure to be here to present our H1 2026 results. I'm Dominic Agee, CEO of Winkworth, and this is Andrew Nicol, CFO. Good morning, everyone. A pleasure to go through the slides now. When we start with this slide, for those who don't know us, just give a bit of background on the company and where we come from as to where we are today and the model itself. Winkworth was established over 190 years ago in 1835. It came to franchising in 1981, which was the first estate agency in the UK to franchise, starting in central London and franchising out from there, which has given us today 105 offices in total, 102 franchise offices and 659 in London. London being, I suppose, the heartland from which we've grown and very much a sort of USP versus other franchise organisations or real estate businesses that don't have that established network across London. The model effectively is to provide a platform for an independent business, independent state agency to operate under our name and compete in the top three in their local marketplace. So we'd like to think of it as that they may have been working for a wholly owned business and they can come and set up their own business and take control of their destiny within our sort of manuals and rules of the road and have everything at the end of the phone that they're used to having as an employee and hopefully for that that enables them to compete better than they could do on their own so for that we'd sort of basically it's eight percent royalty fee or gross revenues there are some additional fees which if you sort of put them all together in relation to sort of training and websites and and training website, put those together, then wrapped it around just shy of 11% of the average office. The local franchisee takes the lease in their own name and we take options on those premises should we need to step in. So we have a very light fixed cost model and we bill centrally so that all the sales contracts are paid to us and then we distribute having deducted our franchise fee which is obviously very good for our cash flow. So yes, that's a little bit about us as a background. And so with that, we'll go into the presentation. Let's start with some operational overview. H1 2036 traded broadly in line with management expectations. The underlying 2036 PVT expected to be slightly ahead, but reported PVT for a full year materially blow market explanation due to ongoing legal and advisory costs. We had a good sales performance there when compared to 2025 and H1 2026. Last year in the first half, we obviously had stamp duty changing, which kind of created another artificial surge of activity. And so to be so close to it in terms of sales performance was actually a fantastic result in the first half of 2026. We continue to grow lettings, which in the face of changing legislation in that market in terms of the Renters' Rights Act, which came on in May, is a fantastic achievement as well and shows the strength of the network in terms of the advising they're giving their clients and the landlords they're managing to retain and convert to property management, as well as acquire new ones. We've supported a franchisee to acquire four new offices, which is our largest assisted acquisition to date. It's in the sort of Nottsworlds area, Cotswolds, Nottsworlds, Warwickshire area. And it's created a whole new hub for us, really, sort of alongside the others we've talked about previously. This is a new point of growth with a really good operator we've supported and some really good talent he's brought into the business. We consolidated our equity offices, owned offices, businesses. We closed down the development commercial investments business. Really, we felt that there was risk attached to it. It was profitable last year, but risk in this market without the recurring revenue underneath it, and perhaps therefore wasn't suitable for us at this time to be involved in. And the Crystal Palace, we sold on to a neighboring franchisee, which fits well with his geography and adds to his own network. Profits, we said, were impacted by exceptional legal costs relating to the board and shareholder matters. The board is in the process of resolving that. We are considering ways to strengthen the board and the company's wider governance to come out fitter and stronger from it all. And then finally, really to say, you know, we were taking the position of having no debt. We were highly cash generative with cash generated from operating activities up 39% in the first half versus the first half last year.

In terms of the actual numbers themselves, network revenue was 31.6 million was down 1% on H1 2025. Within that, as Don sort of alluded to earlier, Network sales revenue at 16.1 million was 5% down on the same period last year, and lettings revenue at 15.5 million was 3% up the previous year. And the lettings sales split had gone from 53 sales, 47 lettings in 2025 on the back of the stamp duty surge that Dominic alluded to, to 51.49. In terms of Winkworth's actual revenue, Dom alluded to the sale of Crystal Palace and the deconsolidation of the development and commercial business. So Winkworth's revenue was down to £4.7 million, 10% down on the last year. I'll be providing a bit more detail on that and on the subsequent side. operating profit before exceptional items as the trading element of the business was nine percent up at 0.84 million versus last year but with the exceptional items profit before tax was down five percent at 0.78 million um The sale of Crystal Palace and wind down of DCI had an impact on the owned offices so their revenue was down 30% and they were roughly breakeven a loss of about 10k at the half year. Cash was at 3.73 million at the half year and ordinary dividends declared were 6.6p in the period. to give a bit more flavour, as I said, about the impact of the sale of Crystal Palace and the wind down of our development and commercial business. This chart, these charts are designed to give a bit of a flavour around that. So the left hand blocks are the position as at H1 2025 and the blocks moving across show the movements to get to H1 2026. So on the revenue side, even though the 8% revenue from sales and lets was down slightly 50K or so down on H1 2025, Overall revenue was up. We had some small increases in our auxiliary fees. We made more money from our CSD business in the first half. And the deconsolidation of Crystal Palace meant that 47k of revenue, which would have been excluded in previous years, actually registered as revenue for this year. That's why that's a wee bit. Pimlico was up 26% revenue half year and half year. Tooting was up 14% half year and half year. And then the downs, the decreases are the wind down of DCI and the closure of Crystal Palace, getting us from the 5202 to 4.7 million. On the PBT side, the... trading element of the franchising business was up by 111k year-on-year pbt that's basically driven by cost savings. We didn't have the one offs that we'd had in H1 2025. There was no investment in Prime Central London marketing, which had been 100k this time last year. And we didn't have an office move, which cost us 70k or so in the first half of last year. There were some cost savings and some small cost increases. The net effect was a significant profit uptick. Pimlico's profitability was up by 24k. Tooting was down slightly, basically on the back of the appointment of a high performing sales director in the business and the timing difference around their sales pipeline. So the start of Q3, slightly frustratingly, has been phenomenally strong it would have been good if that had started a month earlier but hey we are where we are DCI was down year on year as we went through the final knockings of the pipeline Crystal Palace is up because it actually lost money at the half year last year and then the Major element down on the far right is the exceptional legal fees of £105k. I'm afraid we can't talk much about that.